Update on the latest in business:
Update on the latest in business:
Feb. 09, 2018
European shares open lower after US-led slide
LONDON (AP) — European stock indexes have opened lower after another tumble on Wall Street the day before caused jitters through global markets.
European markets had already fallen substantially on Thursday so their declines were not as deep as those seen elsewhere. Britain's FTSE 100 fell 0.4 percent, while Germany's DAX was flat France's CAC 40 declined 0.3 percent.
Asian markets also followed U.S. stocks down after the Dow, coming off a record high, entered a correction — or a 10 percent decline from its latest peak — for the first time in two years. The Shanghai Composite Index was off 4.1 percent after tumbling 5.5 percent at mid-morning. Tokyo's Nikkei 225 was off 2.3 percent and Hong Kong's Hang Seng retreated 3.2 percent.
On Wall Street, the Dow lost 1,032.89 points, or 4.1 percent, to 23,860.46. The Standard & Poor's 500 shed 100.66 points, or 3.8 percent, to 2,581. Even after this week's losses, the S&P 500 index is up 12.5 percent over the past year. The Nasdaq composite fell 274.82 points, or 3.9 percent, to 6,777.16.
FINANCIAL MARKETS-BUDGET DEFICITS
Higher budget deficits a likely factor in stock market rout
WASHINGTON (AP) — The stock market may just have fired off a warning shot to the Trump administration and Congress about their plans to blow up the size of the federal deficit.
The anxiety that has gripped the market this week appeared to escalate Thursday just as President Donald Trump and lawmakers were setting the government up for annual budget deficits that would routinely exceed $1 trillion. The higher that deficits rise, the more likely it is that interest rates will surge, too, and undercut corporate profits, stock prices, consumer spending and the overall economy.
Administration officials have downplayed the risk of simultaneously slashing taxes and boosting spending, arguing that the result will be faster growth that will then shrink the debt. But the higher deficits would come just as the Federal Reserve is on course to continue — and perhaps accelerate — the pace of its short-term rate hikes. The Fed's rate increases will likely lead, in time, to higher borrowing rates for consumers and businesses and likely slow economic growth.
ECONOMY-THE DAY AHEAD
Major business and economic reports due out today
WASHINGTON (AP) — There's only one major government economic report scheduled for release today.
The Commerce Department issues its report on wholesale trade inventories for December.
China's January auto sales growth rebounds to 10.7 percent
BEIJING (AP) — China's auto sales growth in January rebounded from the previous month's contraction, boosted by strong demand for SUVs.
An industry group, the China Association of Automobile Manufacturers, said Friday sales of sedans, SUVs and minivans rose 10.7 percent from a year earlier to 2.4 million. Total vehicle sales including trucks and buses rose 13.6 percent to 2.7 million.
Sales of SUVs, which make up nearly half of purchases, rose 22.9 percent to just over 1 million. Purchases for electric and hybrid vehicles rose 430 percent, though from a low base, to 38,470.
China's auto industry is coming off lackluster 1.4 percent growth last year as the market paid back a 2016 surge following a sales tax cut that boosted purchases by 15 percent.
Trump aims to reduce drug costs under Medicare
WASHINGTON (AP) — President Donald Trump is proposing to lower prescription drug costs for Medicare beneficiaries by allowing them to share in rebates that drug companies pay to insurers and other middlemen.
A senior administration official outlined the plan on condition of anonymity Thursday ahead of the release of Trump's 2019 budget plan next week.
Pharmaceutical companies now pay rebates to insurers and pharmacy benefit managers to help their medications gain a bigger slice of the market.
Insurers apply savings from rebates to keep premiums more manageable.
Under Trump's proposal, seniors covered by Medicare's "Part D" prescription benefit would be able to share in the rebates for individual drugs that they purchase at the pharmacy.
The plan also expands Medicare's "catastrophic" drug benefit so many seniors with very high costs would not face copayments.
White House wants to change pay for federal workers
WASHINGTON (AP) — The White House wants to change how more than 1.5 million federal workers are paid, emphasizing performance-based raises instead of the current system that generally increases pay based on tenure.
Senior officials with the Office of Management and Budget say these changes would be proposed as part of President Donald Trump's 2019 budget plan, to be released Monday.
The officials insisted on anonymity to discuss details that have yet to be made public.
The proposal would slow tenure-based increases, generating $10 billion over 10 years for performance-based payments.
The administration is also studying whether it's better to recruit workers with a defined-contribution retirement plan, rather than a pension plan.
Retail group: Annual retail sales to rise 3.8 to 4.4 percent
NEW YORK (AP) — The nation's largest retail trade group says retail sales will increase 3.8 percent to 4.4 percent this year compared with last year.
The National Retail Federation said Thursday sales will be helped by an improving economy as well as the major tax reform, which means tax cuts for workers and retailers. It's already translating into higher wages and one-time bonuses for workers and should encourage shoppers to spend more.
Retail sales grew 3.9 percent in 2017 over 2016 to $3.53 trillion, according to the U.S. Census bureau's preliminary estimate for the year. The number is subject to revision but exceeded the group's forecast for growth between 3.2 and 3.8 percent.
The outlook comes after the retail industry enjoyed the biggest sales increase for the holiday shopping season since 2010.
CANADIAN PRIME MINISTER-CALIFORNIA
Prime minister pitches Canada as tech-friendly
SAN FRANCISCO (AP) — Canadian Prime Minister Justin Trudeau is in San Francisco to pitch Canada as a destination for tech investors.
He's already having some success.
Salesforce CEO Marc Benioff said Thursday the online business software company will invest another $2 billion in its Canadian operations.
Trudeau also visited online management platform AppDirect, which says it is creating another 300 jobs in Canada in the next five years.
The prime minister didn't answer directly when asked if the current immigration climate in the United States is making his sales job easier.
But he says technology companies are always looking for global talent. He noted that Canada created a new visa to fast-track skilled worker permits in just two weeks.
Trudeau says Canada will continue pushing the U.S. to talk about workforce issues in the talks over the North American Free Trade Agreement.
Airline 'bumping' of passengers falls to lowest rate ever
UNDATED (AP)M — Airlines bumped passengers off flights at the lowest rate on record last year after United Airlines was pilloried when a passenger was dragged off a full plane.
The Transportation Department said Thursday that airlines bumped about one passenger in every 29,000 in 2017, roughly half the rate of the year before.
The figures don't count passengers who accept travel vouchers or other offers to voluntarily give up their seat on an oversold flight.
Meanwhile, there was a spike in long delays that trapped passengers in planes on the ground. Most occurred during a power outage that shut down the Atlanta airport, and many others were during a snowstorm a few days earlier, also in Atlanta.
United vaulted to the top of the government's latest ratings for on-time flights, which cover December.